IT services exporter Tech Mahindra on Friday reported a 14.3 percent jump in its December quarter net profit at Rs 1,309.8 crore driven largely by improving profit margins while the revenues remained stable. The Mahindra Group company had registered a net profit at Rs 1,145.9 crore in the year-ago period and Rs 1,064 crore in the preceding September quarter.

Its overall revenues came at Rs 9,647 crore as against Rs 9,654 crore in the year-ago period and Rs 9,371 crore in the September quarter. It was profit margins, that expanded by 1.70 percent to at the operating level to 15.9 percent, which helped the bottomline. Chief financial officer Manoj Bhat told reporters that a bulk of the expansion on the margins front is attributable to higher offshoring and also to higher utilisation, which touched an all-time high of 87 percent.

The company also reported a massive reduction in its overall headcount at 1.21 lakh, down by over 9,000 people when compared with the year-ago period and over 2,500 if compared with three months ago period. Its chief executive and managing director C P Gurnani said a bulk of the impact came in the business process outsourcing segment, where automation has resulted in lower requirements for talent even as revenues grow.

The company will be giving out salary hikes for the fiscal in a staggered way and the lowest rung of the employees eligible for the increment will start receiving their offers by end of March, Gurnani said. Gurnani said the company will be hiring engineering graduates and also hundreds of business administration post-graduates in the near term.

It closed the quarter with a net total contract value of USD 455 million on new deals, and sees the 5G telecom networks rollout as a big opportunity, Gurnani said. Without giving a guidance for the future, Gurnani said the future quarters for the company will be more robust and Bhat said the company will be able to keep the margins in the targeted level of over 15 percent in FY22.

Gurnani said the company has set up four different task forces within to take care of the future requirements, which include one for the workforce, a grouping for transformation and one for engaging with customers in the absence of physical meetings, Gurnani said. The company scrip closed 2.13 percent down at Rs 961.65 a piece on the BSE on Friday, as against 1.26 percent correction on the benchmark.